Multiple choice

When a cheque is collected by a bank for its customer A, who withdraws the money after collection, and later on, real A establishes that the cheque belonged to him (real A), it is called

  1. foreclosure

  2. subrogation

  3. force majure

  4. conversion

Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Conversion is when for example, someone sells property that does not belong to them without the owner's consent. In this context, the cheque is treated as property, and its value is the amount of the cheque. Since most misappropriated cheques will have been handled by a collecting bank and a paying bank, both become possible defendants in an action for conversion.